Crypto Lender Nexo Capital agrees to pay $45 million in fines to the North American Securities Administrators Association (NASAA) and the U.S. Securities and Exchange Commission (SEC) for failing to register the offer and sale of its Earn Interest Product (EIP).
Nexo is to pay a $22.5 million penalty to the SEC and cease its unregistered offer and sale of the EIP to U.S. investors. Nexo will pay an additional $22.5 million in fines to settle similar charges by state regulatory authorities.
SEC Chair Gary Gensler stated “We charged Nexo with failing to register its retail crypto lending product before offering it to the public, bypassing essential disclosure requirements designed to protect investors. In this case, among other actions, Nexo is ceasing its unregistered lending product to all U.S. investors.”
Nexo consented to a cease-and-desist order preventing it from infringing the registration provisions of the Securities Act of 1933 and the firm didn’t acknowledge or dispute the SEC’s findings.
Nexo will pay a $424,528.30 fine each to the states that are a part of the settlement and stop offering and selling the EIP as well as taking any new investments in it until such time as all such operations are in compliance with all relevant states and federal securities laws.
In December, Nexo decided to leave the US and immediately cease access to its earn interest product in eight states and no longer sign up any new US customers for the earn product.